Economy's growth hit revealed
New Zealand suffered a double dip recession in the wake of the global financial crisis, with the second leg coming in late 2010, new data has revealed
Statistics NZ today released gross domestic product figures for the September quarter showing the economy grew by 0.2 per cent, slightly below most economists' picks.
But it also issued revised GDP numbers that showed the economy contracted 0.3 per cent in the September and December quarters of 2010, following the recession that started in March 2008 and ran until June 2009.
Earlier data had suggested the economy narrowly missed the second dip, by contracting 0.1 per cent in September 2010 and staying flat in the December quarter that year.
Economists define a recession as a contraction in two consecutive quarters.
The revisions also show that growth has been weaker this year than previously thought, with growth in the March quarter revised down from 1.0 per cent to 0.9 per cent, and in the June quarter from 0.6 per cent to 0.3 per cent.
However, the revisions showed the economy performed better in 2011 than previously thought, with all four quarters revised higher by between 0.1 and 0.3 percentage points.
Labour finance spokesman David Parker said the double dip recession came at the same time that National's 'tax-switch', that raised GST, came into force.
"National has trumpeted its tax switch as a boost to the economy. But the truth is it kept growth negative and held the economy in recession," he said.
"National's tax switch was not only unequal and unfair, it choked off demand and the economy shrank."
Finance Minister Bill English today said the economy remained on track for moderate growth over the next few years, "despite growth predictably easing a little in the September quarter".
Annual growth - from the September quarter 2011 to the September quarter 2012 - came in at 2 per cent, after the revisions English said.
"After coming off a good growing season and a strong year for agriculture, other indicators had already pointed to a slightly softer performance in the third quarter," he said.
"However, there are signs that the pace of growth has picked up in recent months, with rising consumer and business confidence and a further strengthening of construction activity. We shouldn't get distracted by the quarterly movements, particularly with the global environment remaining uncertain."
What was important was that the economy is on track for 2 per cent-plus growth over the next few years.
He said the Government's business growth agenda would help support businesses create jobs.
"The unemployment rate is too high and this will be a particular focus for the Government in 2013," he said.
"Despite global headwinds, New Zealand is performing better than many other countries. We're seeing positive signs through higher savings, households and businesses paying down debt, and interest rates and inflation remaining low."